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Virgin Atlantic sees profits taking off this year
[BERLIN] More customers on transatlantic routes, new planes and lower fuel costs mean British airline Virgin Atlantic is expecting a significant boost to earnings in 2015 after reporting its first profit for four years in 2014, its chief executive said.
The 30-year-old airline, which is owned by its British billionaire founder Richard Branson, with 51 per cent, and US carrier Delta Air Lines, is in the throes of a two-year turnaround plan which includes shutting its Little Red domestic airline to concentrate on long-haul.
It has also put a new emphasis on transatlantic routes since Delta bought its stake from Singapore Airlines for US$360 million in 2013.
Virgin and Delta launched a joint venture partnership on transatlantic services at the beginning of last year.
Chief Executive Craig Kreeger said the joint venture added over 10 million pounds to its bottom line in 2014 and that it also saw a boost from cost controls and some help from lower fuel prices.
In total the airline made a pre-tax, pre-exceptionals profit of 14.4 million pounds (S$30.1 million) in 2014 compared to a loss of 51 million in 2013.
Virgin is increasing its transatlantic flights while cutting back on some routes elsewhere and is renewing its fleet with more fuel-efficient Boeing 787 Dreamliners. It expects to be flying eight of the jets by the end of this year. "We believe this company has so much upside in front of us with the Delta joint venture and the new fleet," Mr Kreeger told Reuters, adding that it expected underlying profits to be back by 2018 above its last record high set in 1999 of 99 million pounds.
Falling fuel prices also mean Virgin Atlantic has delayed a decision on replacing the seven Boeing 747s it currently has stationed at London Gatwick airport, Mr Kreeger said. "The 747s are a good aeroplane for us even with oil at US$100 (a barrel) but they're a really good plane at US$60," he said, adding a decision would be made within the next six months.
Mr Kreeger said the strong dollar could mean fewer Britons travelling to the United States this year but that would likely be offset by increased numbers of Americans flying the other way.